CERAWEEK: Energy industry has trapped itself with binary technology talk

The energy industry has trapped itself with binary dialogue about being for one type of technology or another, when all resources need to work together to achieve energy transition goals, Tinker Energy Associates CEO Scott Tinker said March 22.

The energy transition is not just about one technology, but rather a suite of technologies, panelists said at the CERAWeek by S&P Global energy conference in Houston.

"What is nice about renewables and new technology is they're much more democratically distributed around the world," said Andres Gluski, AES Corporation president and CEO. "The reality is a little bit more complicated. But I also think it's not rocket science."

However, the industry has to be careful about status quo because things are changing rapidly, Gluski added.

"In the power industry, we're seeing once in a 100-year events, like floods and heatwaves, etc., occur every year," Gluski said. "The weather has changed. That's the reality."

Industry leaders need to look at how to deliver the electricity with the lowest carbon and in most sustainable way possible, he added.

Renewables versus fossil fuels

Solar and wind costs have dropped remarkably over the years, Tinker said.

"To make it reliable requires something sitting here waiting to back it up ... and that something is expensive," Tinker said about battery storage. "I think we have to be more open and candid about the actual cost of electricity to be integrated."

The domestic production of wind turbines is strong, with battery storage production to come, while domestic of solar panels will take longer, Gluski said. And while renewables do not generate 24 hours a day, coal is not going to come back regardless of political slogans, he added.

"For a lot of these new technologies we need the regulators to be on top of it as a lot more is coming," Gluski said.

The energy transition has to happen at a pace that's politically sustainable, said David Victor, a professor of Innovation and Public Policy with the School of Global Policy and Strategy at University of California, San Diego.

"I'm really concerned that we are overweighting the familiar," Victor said. "We are overinvesting in things we know how to do and probably underinvesting in things that we don't yet know how to do."

Glue that holds it together

"We got to figure out the glue that holds all this together," said Hunter Hunt, chairman and CEO of Hunt Energy.

There will be less natural gas needed than the industry thinks, but more than environmentalists think, he added.

"Wind and solar are absolutely attacking natural gas' share and they've decimated coal in the industrialized world," Hunt said. "If natural gas is going to be a transition fuel, the industry needs to do its part to make sure that we're doing it in the right way."

The future of energy can be seen in Texas today, Hunt said about the battery storage growth happening.

There such a diversity in approaches with new technology and "we need all of it," said Evelyn Wang, director of the Advanced Research Projects Agency-Energy with the United States Department of Energy.

Houston, we have an opportunity

"One of the things that is different today versus this time last year, is just explosion of activity in energy transition-related projects in Houston and Gulf Coast," said Bobby Tudor, CEO Artemis Energy Partners and chairman of the Houston Energy Transition Initiative. "We have enormous competitive advantages here in this region to be a leader, and it's up to us to intentionally do that. ... We intend to continue to exploit that advantage."

Texas has the largest concentration of technical talent in the world related to energy systems, Tudor said, adding the state is well positioned for the task due to its ports and access to wind and solar resources.

A lot of the development in Texas has to do with permitting and the ability to get projects permitted and done, Tudor said, adding that process is much more difficult in rest of the country.

The catch phrase should be "Houston, we have an opportunity" instead of "Houston, we have a problem," said Atul Arya, S&P Global Commodity Insights senior vice president and chief energy strategist.